Fastenal shares slide as quarterly profit misses estimates

[Fastenal industrial products and services distributor. Fastenal has retail stores in every US state]
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Shares of Fastenal (NASDAQ:FAST [https://seekingalpha.com/symbol/FAST]) fell 4.4% in premarket trading Monday after the industrial and construction supplies distributor posted third-quarter earnings that missed Wall Street’s profit expectations.

The Winona, Minnesota-based company reported earnings of $0.29 a share, below analyst estimates of $0.30. Revenue was in line at $2.13 billion, up 11.7% from a year earlier, driven by gains in its fastener and manufacturing end markets.

PROFIT MARGINS AND COSTS

Gross profit margin edged up to 45.3%, from 44.9% a year ago, helped by improved supplier programs and product availability. Operating income rose 13.7% to $441.5 million, missing the consensus estimate of $449.4 million. Operating margin expanded slightly to 20.7%, narrower than the estimate of 21.1%

Still, expenses climbed in step with sales. Selling, general and administrative (SG&A) costs increased 11.5% to $524.3 million, reflecting higher wages, transportation expenses and bonus payouts tied to business performance.

Net income advanced 12.6% year over year to $335.5 million, but higher costs and a slightly elevated tax rate weighed on overall profitability.

SALES GROWTH ACROSS SEGMENTS

Fastenal said strong demand from manufacturing customers, particularly those with large, managed accounts, supported growth, with manufacturing-related sales up 12.7%. The company’s fastener category, which includes products used in OEM and MRO applications, rose 14.4%, outpacing non-fastener categories such as safety and janitorial supplies.

The company also noted improvements in its “FMI” (Fastenal Managed Inventory) technology offerings, with digital footprint sales accounting for over 61% of total revenue in the quarter. However, installations of new vending and bin devices were down modestly year over year.

CASH FLOW AND CAPITAL RETURNS

Operating cash flow surged 30% to $386.9 million, aided by lower tax payments and working-capital improvements. Fastenal (NASDAQ:FAST [https://seekingalpha.com/symbol/FAST]) returned $252.5 million to shareholders in dividends during the quarter and carried $195 million in total debt, representing less than 5% of total capital.

Fastenal (FAST [https://seekingalpha.com/symbol/FAST]) cited steady large-account signings and resilient demand in its manufacturing markets, though it acknowledged that industrial production remains sluggish. Management maintained its 2025 goal of installing 25,000 to 26,000 new vending and bin devices, while signaling ongoing investments in distribution hubs and technology infrastructure.

MORE ON FASTENAL

* Fastenal: Great Business, But Expensive Stock [https://seekingalpha.com/article/4825424-fastenal-great-business-but-expensive-stock]
* Embedded, Efficient, And Expensive: Fastenal's Growth Story With A Premium Tag [https://seekingalpha.com/article/4801966-embedded-efficient-expensive-fastenal-growth-story-premium-tag]
* Fastenal Company: Premium Valuation Means No Room For Error [https://seekingalpha.com/article/4801389-fastenal-company-premium-valuation-means-no-room-for-error]
* Fastenal GAAP EPS of $0.29 misses by $0.01, revenue of $2.13B in-line [https://seekingalpha.com/news/4503544-fastenal-gaap-eps-of-0_29-misses-by-0_01-revenue-of-2_13b-in-line]
* Fastenal Q3 2025 Earnings Preview [https://seekingalpha.com/news/4503340-fastenal-q3-2025-earnings-preview]